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howsermomma
February 23, 2021
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How do I offset my interest expense account?

  • February 23, 2021
  • 1 reply
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I currently have a HELOC set up in QB as a long term liability and a separate Interest Expense account set up as an expense account on that HELOC.  When I make a payment on the HELOC, I have no problem designating part of the payment to the principal and part to the interest expense.  However, my interest expense account will always show a "balance" because all I am doing is making payments to that account.  How do I offset that interest payment each time?

Best answer by SarahannC

Hello there, howsermomma.

 

It looks like everything is going well. There's no need to offset your Interest Expense account. Your liability account is the one that needs to be zeroed. The Interest Expense account records all interest paid to the bank where it can't be zeroed if you paid for it. In the year-end, they'll be in retained earnings as an expense.

 

However, I'd recommend reaching out to your accountant to seek further information about it. They can provide you a thorough explanation on how the interest payment goes. Also, they can ensure your account is properly organized and handled.

 

You may want to check to learn more about accounts in the Chart of Accounts (COA): Learn about the chart of accounts in QuickBooks. 

 

Please let me know if you have more questions. The Community folks are always here to help you anytime. Take care and have a good one.

1 reply

S
SarahannCAnswer
February 23, 2021

Hello there, howsermomma.

 

It looks like everything is going well. There's no need to offset your Interest Expense account. Your liability account is the one that needs to be zeroed. The Interest Expense account records all interest paid to the bank where it can't be zeroed if you paid for it. In the year-end, they'll be in retained earnings as an expense.

 

However, I'd recommend reaching out to your accountant to seek further information about it. They can provide you a thorough explanation on how the interest payment goes. Also, they can ensure your account is properly organized and handled.

 

You may want to check to learn more about accounts in the Chart of Accounts (COA): Learn about the chart of accounts in QuickBooks. 

 

Please let me know if you have more questions. The Community folks are always here to help you anytime. Take care and have a good one.

H
howsermommaAuthor
February 24, 2021

That makes sense, thank you!

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